• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Sources of Finance

Extracts from this document...

Introduction

Sources of Finance Obviously to start my business I will need a large amount of capital which will could be gained through a number of methods which I will describe below pointing out the advantages and disadvantages of each one and then deciding whether it would be a good choice for the business. > Overdraft - This is a sum of money borrowed from the bank, usually for the purchase of small things such as stock, the advantages is its easy to obtain and quick however the main disadvantage is that you are charged daily interest on the money borrowed. This could be useful to the business once it is operating and making a profit however it would not be wise to get into debt with daily interest so early in the business's life > Share Issue / Investor - This is the sale of part of the business for an amount of capital, the advantage is that it is quick and sometimes the investor can also help and/or offer advice, however an obvious disadvantage is that you are loosing complete ownership of the company. ...read more.

Middle

Trade credit is definitely something that my business could use as a source of finance at the start as it could then use the capital it has for other purposes > Hire purchase - Hire purchase is obtaining an item through monthly payments, however the business does not own the item until it has been totally paid for, the advantages of this system is that the business does not have to pay immediately. The disadvantage however is that interest has to be paid on the payments back and therefore the business will end up paying more than if they had just bought the item in the first place. Hire purchase is something that my business could consider however the sort of stock and items that is needed in a sports shop are not really the sort of items that would be bought on hire purchase. > Grants - Grants is capital gained for free, usually given by the local or European government, the advantage is of course the free capital which will help the business, also it does not have to be repaid. ...read more.

Conclusion

My business will not need a mortgage as I have chosen property two which was a lease property meaning that the only money which needs to be paid is the �20,000 per annum fee. > Lease - A lease is where an item is rented for a monthly or annual fee, the advantage is that lease products usually come with a 24 helpline and maintenance service, and also when the product becomes outdated you can just lease a better model etc. However the disadvantage is that the business does not actually own the product, and never will. Personally I feel that leasing an item is a good idea and if the situation where a suitable item is needed for my business I will try and lease it. In the above points I have stated which sources of finance are most suited to my business and why, I will use these to gain the capital, stock and premises needed to start my business. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Accounting & Finance section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Accounting & Finance essays

  1. Marked by a teacher

    Business Finance. There are a number of sources of finance, which businesses will need ...

    3 star(s)

    Government grants often come out with a set of rules for the person who is eligible to apply which can be so specific that it prohibits many businesses. And there may be an increase in the businesses expenses because they tend to demand certain activities which have to be included in any project to be funded.

  2. Exploring business purposes

    Thanks to the close cooperation between all of the plants, manufacturing takes place quickly and flexibly. This creates significant advantages in the international market. The BMW Group currently has 15 production and assembly plants, in seven countries: I am now going to research about Cheney School.

  1. Complete Report on Askari Commercial Bank

    of secure payments without the need to carry cash or debit or credit cards. It allows cash withdrawals from ATMs, transfer of balance to another card, and the refill option, as well as payment of utility bills through ATMs and Internet.

  2. Business and finance

    Select current account. The select current account can save you money, get all the banking services you expect. The services that are on offer are: * �50 interest free overdraft. * High interest on your savings by 0.5% * Discounts on standards loans with a select loan.

  1. Personal finance - I am an advice worker for 'Life Start Bradford', which is ...

    - they offer various products from any providers and are obliged to recommend products that are suitable for your needs. Tied Agents - are company representatives and can only recommend their company's products. Insurance companies, banks and building societies that sell financial products can put you in touch with their own financial advisers.

  2. What does Finance involve.

    of cost, this will help me to find out how much money I will need before starting my business, it is the ladder to my break- even point which lets me the minimum number of products/ services I need to sell/provide in order to make sure my business is not making a lose.

  1. ways of finance (bussiness studies)

    4 Trade credit (short term) Trade credit is where a business customer can have a product or asset and can arrange for it to be paid for at a later date. The disadvantage is have 28 days to pay. The advantages are doing not have to pay for a lot of time.

  2. Identifying and describing the main financial service needs for a student starting at university

    You can use your Service card to get instant access to your money 24 hours a day through Nat west nationwide network of over 30,000 cash machines and abroad where you see the Cirrus or Maestro logos. If you apply for a Master card and take advantage of a preferential introductory interest rate and no annual fee.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work